FCC Bans Exclusive Deals, Considers Other Restrictions

In an effort to "foster greater competition," the FCC has adopted an Order that bans the use of exclusivity clauses between cable operators and apartment communities and other real estate developments, including existing agreements.

They are also considering taking similar action to prohibit exclusive agreements with satellite providers, private cable operators, and other video providers. They want to ax exclusive marketing and bulk billing arrangements, too (which could create a real mess in student housing communities). The goal is to "increase choice and competition" for residents in these communities.

As expected, the NMHC and NAA have come out in oppostion to the ruling (PDF), claiming that the decision "does not enhance tenant choice and will not result in lower prices."

This is an extremely complex, politically charged issue -- and I don't think that anyone is really being honest about the true state of the marketplace in this one.

While there are certainly some bad deals out there that are not in the best interest of the consumer, there are also a number of property owners that have negotiated incredible discounts on premium video services, as well as higher levels of customer service from their providers.

What now?
The coverage surrounding this ruling backs property owners into a corner. Now residents will expect to be able to choose whichever provider they like -- you may want to prep your property staff with some prepared responses to resident questions.

In new construction projects, most of the costs associated with the infrastructure needed for multiple providers will likely be assumed by the developer, which could lead to higher rents or a conscious decision to leave some wiring out of the budget. Existing properties will be even more difficult to upgrade.

Thus far, the Commission and the media have focused this issue on price, but I think the ruling presents a real opportunity for property owners to demand greater innovation from their service providers. If there are three or more providers in a building, the winner will be the one who provides compelling value-added services that are uniquely possible in multifamily communities.

Here's the link (PDF) to the FCC's release explaining their decision. I'll provide a complete roundup of links related to this Order on the Multifamily Technology news feed.